Migration and development

10.02.2016

• Migration is among the most fiercely debated areas of policy, and the human cost of the status quo is vast. 20,000 people have drowned in the Mediterranean in the last two decades trying to cross borders to a better life. Yet, often ignored in the debate is the contribution migration can bring to development.

• The benefits the migrants themselves can derive from moving from a poor to a rich country cannot be understated. The average American has 200 times the lifetime income of the average person in the Congo, someone in Honduras is 229 times more likely to be murdered than someone in Japan. Poor migrants can potentially increase their income, adjusted for purchasing power, by 20 to 30 times by moving to a developed country. On average, Peruvian immigrants in the United States have 3.8 times the income of those with a similar level of education in Peru.

• Most differences in living standards are simply removed when someone moves from a poor country to a richer one. On the whole, development scholars agree that it is a country’s institutions (particularly secure property rights and the rule of law) that determine a country’s level of income, not its people. Because of this, if a Haitian and a German move to the United States (a country with strong institutions), despite the vast differences in income between the countries, most of the difference in average income is removed.

• Migration benefits not only migrants but also those left behind, through the remittances they receive from family and friends abroad. Remittances significantly ameliorate poverty (reducing it in Uganda by 11 percent) and economic growth, provide security in economic and political crises, as well as improve health and education outcomes. Global remittances are now worth more than twice as much as foreign aid.

• The concept of a ‘brain drain’ leads many to assume that migration can only be detrimental to the home countries of migrants, as their best and brightest take their talents elsewhere. This story in not borne out in reality. In fact, data from 127 developing countries led researchers to conclude that the prospect of migration often encourages residents to invest in education, some of whom ultimately choose to stay, leading to a ‘brain gain’ for poorer countries.

• Development scholars and politicians should shift from a ‘transformative’ to a ‘marginal’ approach, and move accordingly from trying to save entire countries through foreign aid programmes to helping their inhabitants by letting them move to stronger instituional environments.

• In the fashion of the UN target of 0.7 percent of GNI for foreign aid, we should adopt a volume target for migration from developing to developed countries. Even a cautious target of increasing such immigration by three percent of the current workforce over a decade would, according to the World Bank, bring the global poor a welfare benefit of 257 billion dollars.